In June 2026, the Federal Tax Authority updated its Corporate Tax Guide on the taxation of family foundations. The guide explains how a family foundation may, where it meets the relevant legal conditions, be treated as an unincorporated partnership for Corporate Tax purposes.
What the guide means for a family foundation
A family foundation is not automatically exempt from Corporate Tax simply because it is set up for family wealth or succession planning. The structure, activities, beneficiaries and the applicable statutory conditions matter. Where the conditions are met, the foundation may be able to apply for transparent treatment; the rules and any required application steps should be reviewed for the specific structure.
Records and governance to review
- Confirm the foundation’s purpose and the activities it actually carries out.
- Review the charter, governing documents, beneficiary classes and any amendments.
- Keep records of distributions, assets, related entities and decision-making.
- Check whether any business or investment activity affects the conditions for treatment.
- Document the tax position and retain the FTA’s current guide with the supporting file.
Because the treatment depends on facts and conditions, a foundation should not rely on its legal form alone. Consider the Corporate Tax treatment before filing and when the foundation’s activities or beneficiaries change.
Official source: FTA Corporate Tax Guide: Taxation of Family Foundations.
This article is general information, not advice on a particular foundation. Check the current law and guide against the governing documents and actual activities.
